Checklist for Reviewing Procurements by Federal Grant ...

Checklist for Reviewing Procurements by Federal Grant Grantees and Subgrantees

This checklist was created to assist FEMA grantees and subgrantees in complying with the federal requirements that procurements must meet in order for FEMA to reimburse eligible expenses. Importantly, this checklist is intended to provide general guidance only and does not provide a detailed explanation of the Federal procurement requirements ? it is NOT intended to serve as legal advice and FEMA makes no guarantee that adherence to this checklist will result in full reimbursement of eligible expenses. To understand the requirements fully, the user should review the provisions of 44 C.F.R. ? 13.36, which is the source of these requirements as they apply to State, Local and Tribal governments. In addition, the user may review FEMA's Field Manual, Public Assistance Grantee and Subgrantee Procurement Requirements, which is available on the internet by searching for "FEMA Procurement Field Manual." If any questions arise, please contact your servicing attorney or legal counsel for assistance.

For disasters and emergencies declared prior to 26 December 2014, the relevant procurement standards are found in 44 C.F.R. ? 13.36(a)-(i) (States, local and tribal governments) and 2 C.F.R. ? 215.40-48 (Institutions of Higher Education, Hospitals, and Private Non-Profits).1 This checklist specifically addresses the procurement standards found in 44 C.F.R. ? 13.36. For guidance related to the procurement standards applicable to Institutions of Higher Education, Hospitals and Private NonProfits, please refer to PUG Checklist pt. 215. For disasters and emergencies declared after 26 December 2014, please refer to PUG Checklist pt. 200 for the applicable procurement standards for all grantees and subgrantees.

Instructions: Each standard below is followed by a block for "Yes", "No", or in some cases, "Not Applicable" or "N/A." Red font is used to indicate the response which, if checked, indicates that the contract does not comply with federal procurement standards.

1. Does the procurement comply with the State's own procurement laws, rules, and procedures? ?13.36(a) Yes No

2. Does the purchase or contract include all clauses required by Federal statutes and executive orders and their implementing regulations? ?13.36(a) Yes No

1 This includes projects associated with declarations issued prior to 26 December 2014, regardless of project start date. For example, if a disaster was declared on 1 November 2014, but contracting for a project under that declaration did not begin until 1 April 2015, then a State (or state agency/instrumentality) would still utilize the old procurement standards found at 44 C.F.R. ? 13.36(a); local and tribal governments would follow ? 13.36(b)-(i); and Institutions of Higher Education, Hospitals, and Private Non-Profits would use 2 C.F.R. ?? 215.40-48.

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If a State or State agency is awarding the contract, stop here. If the contract is being awarded by a local or tribal government, continue with the checklist.

3. Procurement Standards2

a. Does the procurement comply with the Applicant's own procurement laws, rules, and procedures? ?13.36(b)(1) Yes No

b. Does the Applicant maintain a contract administration system which ensures that contractors perform in accordance with the terms, conditions, and specifications of their contracts or purchase orders? ?13.36(b)(2) Ye s No

c. Does the Applicant have:

i. Written standards of conduct covering conflicts of interest and governing the performance of its employees engaged in the award and administration of contracts? ?13.36(b)(3) Yes No

ii. Any employee, officer, or agent participating in the selection, award, or administration of a contract supported by a Federal award that has a real or apparent conflict of interest?3 ?13.36(b)(3) Ye s No

iii. Any employee, officer, or agent that has solicited and/or accepted gratuities, favors, or anything of monetary value from contractors or parties to subcontracts?4 ?13.36(b)(3)(iv) Ye s No

iv. Written standards of conduct that provide for disciplinary actions to be applied for violations of such standards by officers, employees, or agents of the Applicant. ?13.36(b)(3)(iv) Ye s No

d. Has the Applicant reviewed the proposed procurement to avoid the purchase of unnecessary or duplicative items? Has the Applicant considered consolidating or breaking out procurements to obtain a more economical purchase? Where appropriate, has the Applicant considered lease versus purchase alternatives to determine the most economical approach? ?13.36(b)(4) Yes No

2 See, 44 C.F.R. ? 13.36(b) 3 Such a conflict of interest would arise when the employee, officer, or agent, any member of his or her immediate family, his or her partner, or an organization which employs or is about to employ any of the parties indicated herein, has a financial or other interest in or a tangible personal benefit from a firm considered for a contract. 4 However, Applicants may set standards for situations in which the financial interest is not substantial or the gift is an unsolicited item of nominal value.

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e. Encouraged, but not required standards.5

f. Is the contract being awarded to a responsible contractor possessing the ability to perform successfully under the terms and conditions of the proposed procurement, giving consideration to such matters as contractor integrity, compliance with public policy, record of past performance, and financial and technical resources? ?13.36(b)(8) Yes No

g. Is the Applicant keeping records sufficient to detail the significant history of the procurement, including, but not limited to, records documenting the rationale for the method of procurement, selection of contract type, contractor selection or rejection, and the basis for the contract price? ?13.36(b)(9) Yes No

h. Is the contract a time-and-materials contract?6 ?13.36(b)(10) Yes No

i. If so, has the Applicant documented why no other contract is suitable?

Yes

No

ii. Does the contract include a ceiling price that the contractor exceeds at its own risk? Yes No

i. Is the Applicant alone responsible, in accordance with good administrative practice and sound business judgment, for the settlement of all contractual and administrative issues arising out of procurements? ?13.36(b)(11) Ye s No

j. Does the Applicant have protest procedures7 to handle and resolve disputes relating to their procurements? ? 13.36(b)(12) Ye s No

5 ?13.36(b)(5) ? to foster greater economy and efficiency, Applicants are encouraged to enter into state and local intergovernmental agreements or inter-entity agreements where appropriate for procurement or use of common or shared goods and services (this section provides the authority for state schedule and mutual aid agreements, for example); ?13.36(b)(6) ? Applicants are encouraged to use Federal excess and surplus property in lieu of purchasing new equipment and property whenever such use is feasible and reduces project costs; and ?13.36(b)(7) ? Applicants are encouraged to use value engineering clauses in contracts for construction projects (value engineering is a systematic and creative analysis of each contract item or task to encourage the contractor to develop more cost effective means to produce or procure requirements.). 6 Time and materials type contract means a contract whose cost to an Applicant is the sum of: (i) The actual cost of materials; and (ii) Direct labor hours charged at fixed hourly rates that reflect wages, general and administrative expenses, and profit. Because this formula generates an open-ended contract price, a time-and-materials contract provides no positive profit incentive to the contractor for cost control or labor efficiency. Therefore, a time-andmaterials contract must set a ceiling price that the contractor exceeds at its own risk. Further, the Applicant awarding such a contract must assert a high degree of oversight in order to obtain reasonable assurance that the contractor is using efficient methods and effective cost controls. [Note that FEMA will only reimburse costs under a time-and-materials contract for the first 70 hours of work performed. See FEMA PA Guide (2007 ed.), pg. 53.] 7 Protests in the context of the procurement under grants field includes both pre-award controversies (protests) and post-award controversies (disputes), unlike protests under Federal government contracting, where protests refer only to pre-contract award controversies.

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i. If a protest occurs, has the Applicant disclosed information regarding the protest to the awarding agency? ?13.36(b)(12) Ye s No

4. Competition:

a. All procurement transactions must be conducted in a manner providing full and open competition consistent with the standards of this section. Does the procurement involve any of the following8 ? 13.36(c):

i. Placing unreasonable requirements on firms in order for them to qualify to do business? ? 13.36(c)(1)(i) Yes No

ii. Requiring unnecessary experience and excessive bonding? ? 13.36(c)(1)(ii) Yes No

iii. Noncompetitive pricing practices between firms or between affiliated companies?9 ? 13.36(c)(1)(iii) Yes No

iv. Noncompetitive contracts to consultants that are on retainer contracts?10 ? 13.36(c)(1)(iv) Yes No

v. Organizational conflicts of interest?11 ? 13.36(c)(1)(v) Yes No

vi. Specifying only a "brand name" product instead of allowing "an equal" product to be offered and describing the performance or other relevant requirements of the procurement? ? 13.36(c)(1)(vi) Yes No

vii. Any arbitrary action in the procurement process? ? 13.36(c)(1)(vii) Yes No

b. Does the contract include a state or local geographical preference for local contractors?12 ? 13.36(c)(2) Yes No

c. Do the Applicant's written selection procedures for procurement transactions ensure that all solicitations comply with the following: ? 13.36(c)(3):

8 This list is non-exclusive and only serves as an example of some of the types of situations that are considered to be restrictive of competition. 9 For example, bid suppression or bid rigging. 10 For example, out-of-scope disaster work added to the consultant's work on retainer. 11 See, Fns 14 & 16. 12 Geographic preferences are generally not allowed under FEMA grants. The only exception concerns contracting for architectural and engineering (A/E) services, geographic location may be a selection criterion provided its application leaves an appropriate number of qualified firms, given the nature and size of the project, to compete for the contract. Additionally, nothing in this section preempts State licensing laws.

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i. Incorporate a clear and accurate description of the technical requirements for the material, product, or service to be procured? ? 13.36(c)(3)(i) Yes No

ii. Identify all requirements which the offerors must fulfill and all other factors to be used in evaluating bids or proposals? ? 13.36(c)(3)(ii) Yes No

d. If the Applicant is using a prequalified list of persons, firms, or products which are used in acquiring goods and services: ? 13.36(c)(4) N/A i. Is the list current? ? 13.36(c)(4) Ye s No ii. Does the list include enough qualified sources to ensure maximum open and free competition? ? 13.36(c)(4) Ye s No iii. Were any potential bidders precluded from qualifying during the solicitation period?13 ? 13.36(c)(4) Yes No

5. Methods of Procurement

a. Is the Applicant properly using one of the following acceptable methods of procurement? ? 13.36(d): i. Small purchase procedures ? 13.36(d)(1) Yes No 1. [Note: Small purchase procedures are those relatively simple and informal procurement methods for securing services, supplies, or other property that do not cost more than the lesser of either (1) the federal small purchase threshold (i.e., $150,000), or (2) whatever amount State or local procurement rules set as the small purchase threshold ? if more restrictive than the federal threshold.] 2. Does the procurement fall under the small purchase threshold of $150,000? ? 13.36(d)(1) Ye s No

13 Pre-qualified lists are NOT contracts. Contractors on a pre-qualified list may be solicited directly during a solicitation under full and open competition (or non-competitive procurement procedures ? if all mandatory requirements are met); however, any firms not on the pre-qualified list must also be allowed to submit their qualifications, and if found qualified, allowed to submit their bid or proposal in response to the solicitation and be considered in accordance with the evaluation and award criteria established by the solicitation.

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3. Did the Applicant obtain price or rate quotations from an adequate number of qualified sources?14 ? 13.36(d)(1) Yes No

ii. Sealed bids ? 13.36(d)(2)15 Yes No

1. [Note: Bids are publicly solicited and a firm fixed price contract (lump sum or unit price) is awarded to the responsible bidder whose bid, conforming with all the material terms and conditions of the invitation for bids, is the lowest in price. Sealed bidding is the preferred method for procuring construction]

2. Are all of the following conditions to use sealed bidding present? ? 13.36(d)(2)(i) Yes No

a. A complete, adequate, and realistic specification or purchase description is available ? 13.36(d)(2)(i)(A) Yes No

b. Two or more responsible bidders are willing and able to compete effectively for the business ? 13.36(d)(2)(i)(B) Yes No

c. The procurement lends itself to a firm fixed price contract and the selection of the successful bidder can be made principally on the basis of price ? 13.36(d)(2)(i)(C) Yes No

3. If sealed bids are used, the following requirements apply:

a. Did the Applicant publicly advertise and solicit bids from an adequate number16 of known suppliers, providing

14 FEMA has determined that for simplified purchase procedures, an adequate number of qualified sources is no less than three (3). See, FEMA Recovery Fact Sheet 9580.212 ? Public Assistance Grant Contracting Frequently Asked Questions (FAQ), FAC No. 3. 15 Sealed bidding is generally used where price is the most important evaluation factor for the Applicant. Accordingly, contract award under the sealed bidding method of procurement is made to the bidder submitting the lowest priced, responsive and responsible bid. "Responsive" refers to whether the bidder meets all the material requirements of the Invitation for Bid (IFB), while "Responsibility" is described at ? 13.36(b)(8). 16 Unlike, for simplified purchase procedures, FEMA has not defined an "adequate number" of known sources under the sealed bidding method. While left undefined, Applicant is likely to meet this requirement through the application of "full and open competition." (See fn. 26)

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them sufficient response time prior to the date set for opening the bids? ? 13.36(d)(2)(ii)(A) Yes No

b. Did the invitation for bids include any specifications and pertinent attachments, and define the items or services in order for the bidder to properly respond? ? 13.36(d)(2)(ii)(B) Yes No

c. Did the Applicant open all bids at the time and place prescribed in the invitation for bids? ? 13.36(d)(2)(ii)(C) Yes No

d. Did the Applicant award a firm fixed price contract award in writing to the lowest responsive and responsible bidder? ? 13.36(d)(2)(ii)(D) Yes No

e. If any bids were rejected, was there a sound documented reason supporting the rejection? ? 13.36(d)(2)(ii)(E) Ye s No N/A

iii. Procurement by competitive proposals17 ? 13.36(d)(3) Yes No

1. [Note: The technique of competitive proposals is normally conducted with more than one source submitting an offer, and either a fixed price or cost-reimbursement type contract is awarded. It is generally used when conditions are not appropriate for the use of sealed bids.]

2. Did the Applicant publicize the Requests For Proposals (RFPs) and identify all evaluation factors and their relative importance? ? 13.36(d)(3)(i) Yes No

3. Did the Applicant solicit proposals from an adequate number of qualified sources?18 ? 13.36(d)(3)(ii) Yes No

17 Whereas contract awards under sealed bidding are focused on selecting the lowest responsive responsible bid, Applicants under the competitive procurement method may prioritize non-price factors, such as technical capability or past performance, over price and therefore award a contract to a contractor whose proposal is more expensive but reflects a better overall value to the Applicant (e.g. "best value" contracting). 18 Unlike, for simplified purchase procedures, FEMA has not defined an "adequate number" of qualified sources under the competitive procurement method. While left undefined, an Applicant is likely to meet this requirement through the application of "full and open competition."

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4. Did the Applicant have a method for conducting technical evaluations of the proposals received and for selecting awardees? ? 13.36(d)(3)(iii) Yes No

5. Did the Applicant award the contract to the responsible firm whose proposal is most advantageous to the program, with price and other factors considered? ? 13.36(d)(3)(iv) Yes No

6. [Note regarding architectural/engineering (A/E) professional services: The Applicant may use competitive proposal procedures for qualifications-based procurement of A/E professional services whereby competitors' qualifications are evaluated and the most qualified competitor is selected, subject to negotiation of fair and reasonable compensation. The method, where price is not used as a selection factor, can only be used in procurement of A/E professional services. It cannot be used to purchase other types of services though A/E firms that are a potential source to perform the proposed effort.]

iv. Noncompetitive proposals ? 13.36(d)(4)) Yes No

1. [Note: Procurement by noncompetitive proposals is procurement through solicitation of a proposal from only one source (or an improperly limited number of sources)]

2. Has the Applicant determined that award of a contract is infeasible under small purchase procedures, sealed bids or competitive proposals? ? 13.36(d)(4)(i) Ye s No

3. Does one or more of the following circumstances apply? ? 13.36(d)(4)(i) Yes No

a. The item is available only from a single source; ? 13.36(d)(4)(i)(A) Yes No

b. The public exigency or emergency19 for the requirement will not permit a delay resulting from competitive solicitation; ? 13.36(d)(4)(i)(B) Yes No

c. The awarding agency authorizes noncompetitive proposals; ? 13.36(d)(4)(i)(C) Yes No

19 For an explanation of what "emergency" and exigency" mean, see PDAT Manual, pg 68.

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